Vietnam Vows to Tighten Cryptocurrency Regulation

Apr 16 2018 | by OrionW

On 11 April 2018, the Prime Minister of Vietnam signed a directive that called for the country’s central bank and the Ministry of Finance to strengthen the management of cryptocurrency-related activities.  The announcement came in the wake of an alleged multi-million-dollar scam perpetrated by Modern Tech Jsc. 

Modern Tech Jsc, a company based in Vietnam, was accused of scamming 32,000 people of an estimated US$660 million (approximately S$864.37 million).  Investors were promised a return of at least 48 percent in fiat currency for investments exceeding S$1,000 and an additional eight percent commission for every new member whom an investor introduced.  However, the drop in the value of the tokens caused the company to change its tactic and repay the investors in tokens, which could not be withdrawn in fiat currency.

Whilst cryptocurrencies are not recognised as a legitimate tender by the country’s central bank, there is currently no law in place that explicitly bans the possession of cryptocurrencies such as Bitcoin and Ether.

In the directive, the country’s central bank was instructed to inform all banks not to provide any payment services in relation to illegal cryptocurrency transactions.  The Ministry of Public Security was also tasked to prevent money laundering and terrorist financing through cryptocurrency transactions.

The Prime Minister also called for the Ministry of Justice to complete the project to develop a “uniform and unified legal framework on the management and handling of virtual currency, virtual property and electronic money” that was first approved by the Vietnam government in August 2017.